The MoneyTalk guide to COVID-19 financial relief

If you’re facing a loss or interruption of income right now, help may be available. Here is an evolving overview of the relief programs for individuals and businesses that have been announced so far.

Last updated: June 3, 2020

With COVID-19 impacting every corner of the world and almost every sector of the economy, there’s a good chance your financial life has been affected in some way. Work, school, future plans and more have been turned upside down. If you do need financial support, whether for yourself, your family or your business, there are a number of government programs that can help during these unprecedentedtimes.

Here’s a roundup of some of the more popular programs. Keep checking back. We will update this guide as benefits evolve and new supports are added. If you need guidance, reach out to your financial provider.

INDIVIDUALS AND FAMILIES

Canada Emergency Response Benefit (CERB)

The CERB is the most wide-ranging program available, covering individuals who can no longer work as well asthose who are experiencing decreased income because of COVID-19.

You may beeligible to receive $2,000 a month until at least October if:

You have been let go from a job after March 15 (CERB is currently being offered in place of Employment Insurance for those who have been laid off on or after that date).

You are self-employed and now earn little or no income (people can earn $1,000 a month in income and still qualify).

You had to leave work to care for children who are no longer in school.

You are sick with COVID-19 or are taking care of someone who has fallen ill.

How to apply:Simply log in to your MyCRA account or use the Service Canada website (but not both) and follow the instructions. You must reapply every four weeks and indicate that you are still eligible to receive the CERB. Payments can arrive quickly and in many cases can be direct-deposited into your bank account.

If you are no longer eligible, either because you got a new job or have returned to work after recovering from the coronavirus, do not reapply. There may besituations – perhapsyou received a cheque but found work soon after – where you could be required to repay the CERB.

Canada Child Benefit (CCB)

The CCB isn’t a new program. Most households with children under the age of 18 are eligible for this monthly payment, the amount of which is based on your family’s annual net income. What is new is that in May, families will receive up to $300 extra per child as part of that month’s regular payment. It’s a one-time increase, so, as of now, payments in future months are not getting bumped up.

Mortgage and loan payment deferral

As soon as it became clear that COVID-19 would wreak havoc on Canadians’ jobs and personal finances, Canada’s majorbanks announced that they would consider deferring payments on mortgages and other loans by up to six months. This support is not government-sponsored– you have to phone your lender and talk to them directly. While principal and interest payments can be delayed, the interest itself will continue to accumulate, so homeowners who defer payments may have to pay a bit more in interest over the lifetime of their mortgage.

Extended taxfiling deadlines

The tax deadline for individuals usually falls on the last day of April, but not this year. Because of the uncertainty around people’s jobs and finances, the government extended the tax filing date to June 1, 2020. If you owe money to the taxman, you will have until September 1 to pay without incurring interest or penalties. (The deadline for paying would have typically been the last day of April.) Self-employed individuals usually have slightly different deadlines than traditionally employed people, but this year the filing date remains unchanged at June 15, 2020, while the deadline for payments has been extended to September 1, 2020.

How to apply:Simply file as soon as you are able. The government can’t pay you any money it owes you until you file, so submit now and get those dollars sooner. If you owe money, you will still have to pay it – the earlier you know what you have to hand over the better. You can find out more about the new deadlines here.

Temporary wage top-up for low-income essential workers

If you are an essential worker and considered to be low-income, the federal government announced on May 7 that it will team up with provinces and territories to share the cost of wage top-ups for qualifying essential workers. Ottawa will provide up to $3 billion in support to increase essential worker wages. Each province or territory will determine which workers are eligible and how much support they will receive.

SENIORS

Lowered RRIF withdrawals

If you have a registered retirement income fund (RRIF), or plan toopen one soon, you may know that you have to withdraw a certain percentage of assets from the fund eachyear. After the market declinedin March, the government reduced minimum withdrawal amounts by 25%. So, for example, instead of having to remove a minimum 5.28% of assets at age 71, you now have to take out 3.96%.

The government made this change because it didn’t want seniors to have to lock in losses after the market declined. By allowing people to leave more money in their RRIF, those investments may have time to rebound.

One-time payment

Seniors are also set to receive a one-time payment of up to $500 to help with increased costs related to the COVID-19 pandemic. Those who qualify for Old Age Security (OAS) will be eligible to receive a one-time, tax-free payment of $300. Those eligible for the Guaranteed Income Supplement (GIS) will get an extra $200. If you qualify for both you will get the full $500.

How to apply: The payments will be applied automatically and distributed starting the week of July 6, 2020.

STUDENTS & YOUTH

Canada Emergency Student Benefit (CESB)

Students mayhave trouble finding jobs this summer, and many won’tqualify for the CERB. On April 22, the government announced the CESB will provide financial support to students and new graduates who cannot work because of COVID-19 but are not eligible for either the CERB or EI. This cohort will receive $1,250 per month, while students with dependents or disabilities will receive an additional $750 per month. How to apply: The details are still being discussed, so check the government’s student-focused COVID-19 page for more information.

Student loan relief

If you’ve borrowed money to pay for school, you may be happy to know that payments and interest on certain loans have been suspended until September 30, 2020. If your loan was issued in Newfoundland, New Brunswick, Ontario, Saskatchewan or British Columbia, the suspension applies to federal and provincial parts of the student loan. For Prince Edward Island, Nova Scotia, Alberta and Manitoba, this relief program only applies to the Canada Student Loan portion of the loan. For Quebec students, check here for updates.

BUSINESS OWNERS

Canada Emergency Wage Subsidy (CEWS)

If you run a business, you’ll likely want to keep your staff working, but that can be tough if your revenues have plummeted. To help employees remain on payroll, the government created the CEWS, which covers 75% of an employee’s wages up to $58,700. That works out to be $847 a week. Businesses must show that they’re doing what they can to pay the extra 25%.

A business is eligible for the CEWS if revenues have fallen by 15% in March or 30% in April and May when compared to the previous year or when compared to the average revenue in January and February of this year. Companies can also get a full refund for employer contributions of Employment Insurance, Canada Pension Plan, Quebec Pension Plan and Quebec Parental Insurance Plan for staff who are on leave with pay. The program was to run until June 6, but will now be in place until August 26.

Temporary 10% Wage Subsidy

There is another wage subsidy program, though it works differently than the CEWS. The Temporary 10% Wage Subsidy is a three-month program that allows eligible employers to reduce the amount of payroll deductions that must be remitted to the Canada Revenue Agency. The subsidy is equal to 10% of the remuneration you pay from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee to a maximum of $25,000 total per employer. This is separate from the CEWS, so you may be able to qualify for both.How to apply:See the government’s temporary wage subsidy site for all the details.

Canada Emergency Business Account (CEBA)

Even with wage subsidies, you may need more money to run your business. The CEBA offers interest-free loans of up to $40,000 for eligible small businesses that have paid out at least $20,000 in payroll last year and not-for-profits to help them cover operating costs. If you repay the loan before the end of 2022, 25% of the loan (up to $10,000) will be forgiven.

On May 19, Prime Minister Justin Trudeau announced that the eligibility criteria for the CEBA would be expanded. More information is expected to be announced soon.

Canada Emergency Commercial Rent Assistance (CECRA)

Paying rent has been an issue for many small business owners. The government is helping with that, too. The CECRA program lowers rent by 75% for small businesses that have experienced a 70% drop in revenue and are paying $50,000 or less in rent per month. It’s a bit of a complex program, but here’s how it works:

Eligible commercial property owners will be given forgivable loans to cover up to half of three months‘ rent owed by small businesses.

The loans will be forgiven if the property owner reduces their tenants’rent by at least 75% and agrees to not evict the tenant while the rent forgiveness agreement is in place.

The small business is responsible to pay 25% of the remaining costs.

How to apply:To qualify for this program, properties must have a mortgage. The Canada Mortgage and Housing Corp, which is administering this program, will disburse the forgivable loans directly to the property owner’s mortgage lender. The CMHC has said it will find a way to help those without mortgages participate in the CECRA, but details have not yet been announced. Keep checking the CECRA site for updates and more information.

Corporate tax deferral

Like individuals, companies have been given more time to file and pay their 2019 taxes. Corporations that normally file between March and June 1 can now file by June 1, 2020. If your company owes money that comes due on or after March 18 – this mayinclude a balance due or an installment payment – you now have until September 1 to pay without penalty. (This is for Part I-related tax only.) The Government of Canada’s website has more details.

Work Sharing (WS)

This program has been in existence for a while, but the government has recently modified its terms. WS is meant for companies that have experienced a temporary decrease in business activity for reasons beyond the employer’s control. Eligible employees who agree to reduce their normal working hours, and share available work with other staff, can receive EI benefits, despite not being laid off. The government has extended the maximum time of work-sharing agreements from 38 weeks to 76 weeks for companies impacted by COVID-19. Find out more details here.

Large Employer Emergency Financing Facility

On May 11, the federal government announced the Large Employer Emergency Financing Facility (LEEFF). The program will provide bridge financing to companies whose needs during the pandemic are not being met through conventional financing. The intent is to allow these companies to keep their operations going.

There will be restrictions. The government has made clear the measures are not a bailout and that the government should be considered a lender “of last resorts.”

In addition to strict limits to dividends, share buy-backs and executive pay, qualifying companies must be able to demonstrate that:

They will preserve jobs

They will respect collective bargaining agreements and worker pensions

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